A judge in New York has ruled that three top multifamily brokers based in Denver who jumped firms in May can’t offer their services in Colorado until next July, prompting their attorneys to ask whether the men are even able to attend industry conferences during that time.
The brokers — Terrance Hunt, Shane Ozment and Chris Cowan — were among nine Colorado brokers that left Newmark for CBRE in May. Lawsuits immediately followed; Newmark sued the brokers in New York, where the company is based, and the brokers sued in Colorado.
Newmark has said the men are subject to a non-compete agreement hammered out during a 2014 acquisition, saying they could not work for a “competing business” for two years if they left before October 2021. The three brokers have argued that that agreement was superseded by a later one, and that the original agreement is unenforceable anyway.
In mid-July, New York Supreme Court Justice Barry Ostrager issued an order prohibiting Hunt, Ozment and Cowan from the following for one year:
1) “Providing any brokerage services in the State of Colorado or any brokerage services that have any nexus with the State of Colorado”
2) “Directly or indirectly competing” with Newmark in Colorado
3) “Acquiring any interest in or providing any services to any brokerage firm in Colorado” that competes with Newmark
4) Disparaging Newmark
Ostrager said he issued the ruling because, after two hearings, he felt Newmark had “established a likelihood of success on the merits of its claims.” CoStar first reported the ruling.
In recent years, Hunt and Ozment have handled many of the Denver region’s high-eight-figure and nine-figure apartment sales. Cowan specializes in the sale of sizable tracts of urban and suburban land, typically for multifamily or mixed-use development.
All three brokers joined Newmark in 2014, when its parent company acquired their former employer, Apartment Realty Advisors. The other six brokers that jumped to CBRE in May had not joined Newmark as a result of that acquisition.
The brokers have appealed Ostrager’s ruling. In the meantime, however, their attorneys have been trying to figure out what work they are still allowed to do.
In a July 26 letter to Newmark, an attorney with Faegre Drinker said they believe the judge’s order doesn’t prevent the brokers from working on transactions for non-Colorado properties, or for working with CBRE subsidiaries in roles that do not require a brokerage license.
“We do not believe the Order prohibits our clients from attending industry conferences,” the attorney wrote.
A Newmark executive responded that the company would “not engage with you to develop a scheme by which your clients can skirt the obligations.”
“The activities you suggest in your letter likely violate both the letter and spirit of the Injunction,” David Paul, the firm’s co-head of litigation, wrote.
In response, another Faegre Drinker attorney sent a letter Aug. 3 outlining the same general questions to the judge. But in a Monday filing, Ostrager declined to delve into the specifics.
“In the opinion of the Court, the decision is clear,” the filing read. “Counsel shall confer and agree upon any additional details that are necessary.”
CBRE was originally named as a defendant in the New York lawsuit, but has since been dropped. In a statement, the company focused on the fact that the order only extends for one year.
“We agree with the court that Newmark’s unlimited employment restrictions were unreasonable,” CBRE said. “We look forward to working with Terrance Hunt, Shane Ozment and Chris Cowan in a manner consistent with the Court’s decision.”
Newmark and attorneys for the three brokers did not respond to separate requests for comment Tuesday.
The related case filed by the brokers in Colorado is ongoing.